The Gap Between Minimum Wage and Cost of Living is Growing

According to economic experts at the Massachusetts Institute of Technology (MIT), the American middle class is shrinking at an alarming rate. Amy Glasmeier, professor of economic geography at MIT, created a Living Wage Calculator that contrasts the cost of living versus the minimum wage across the United States; and what she found will infuriate most Americans.

“We noticed that counties in poor regions had left poverty in the 1990s and then descended again into poverty,” Glasmeier said. “We searched for the reason why and found that a lot of former poor counties that climbed out of poverty fell back in because they lost major employers. We knew that costs would not fall as fast and hence the tool was built to look at living costs.”

Living wage map for a parent with spouse and two children. Courtesy of City Lab

The tool works like this: You may choose one of three types of households (married couple with two children, a single parent with one child, or a single adult). Once your household type is selected, the application maps the discrepancy between the cost of living needed to get by and minimum wage for the household. The darker red the county or city is, the greater the disparity.

To no one’s surprise, cities like Washington, D.C., Boston, and New York City are very deep in the red. In D.C., the living wage for a someone supporting a spouse and two children is $28.33. In Boston, it’s $27.01. Meanwhile, in Portland, it’s even harder to get by. A Multnomah county family of four would need to earn $15.36 more per hour, while a two-person household requires $14.01 more per hour; and a single person needs to earn $2.15 more per hour. It’s disheartening to see that in every county, four-person households must live beyond their means to survive.

Glasmeier created the application with the help of Allen Carroll, who works at the mapping technology company Esri. Carroll noted,“While the counties that capture major cities such as San Francisco had an unsurprising gap between minimum wage and the living wage, big surprises came from Washington and Virginia.” Four of Virginia’s countries were amongst the top-10 counties with the biggest gaps between cost of living and minimum wage. In contrast, Washington state had the lowest living-cost disparity in the nation.

The only state partially in the green was Washington, where the cost of living is lower than minimum wage ($9.32), but that was only for single people. But when it comes to a household of more than one, Washington state is similar to the rest of the country. The map proves that for most minimum-wage workers, surviving with families is a tremendous struggle throughout the country.

Living wage gap for a single person, showing Washington state with the least disparity. Courtesy of City Lab

As the rich get richer, the poor are staying poor; and the middle class is descending into poverty. The minimum wage climaxed in 1968 at $8.54 per hour (adjusting for inflation). But the current minimum wage at $7.25 is too little for the 3 million hourly employees who are paid at (or below) that brink, and definitely not on par with the wage increases of other developed nations.

According the Gini Index, the wealth inequality in America is worse than that of Russia, but slightly better than Mexico. Although several states have higher local minimum wages (with some cities planning to raise them further), the entire United States is not where it should be for a “rich” country.

Do you think the minimum wage should be increased?

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Zara is a freelance writer and filmmaker who has worked for numerous magazines and news sites. When not coming up with puns or writing screenplays, she enjoys having blind children read to her and donating plasma TVs.
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